MSMEs have USD 150-200 bn worth opportunities in Defence Sector: Former DRDO chief Saraswat
Updated: Jun 12, 2015 01:57:53pm
New Delhi, June 12 (KNN) MSMEs have 150 to 200 billion dollars of opportunities in the defence sector for which they to need to upgrade their infrastructure in terms of modern methods of manufacturing, and also focus on quality control, certification and stringent regulatory mechanisms, former DRDO chief said.
V K Saraswat, Member NITI Aayog and former Secretary of Defence (Research & Development) and Director General of Defence Research & Development Organisation (DRDO) said this while addressing at a seminar on ‘Opportunities for MSMEs in Defence Sector’ organized body industry body FISME on Thursday.
Interacting with the small entrepreneurs, Saraswat said, “You have almost about 150-200 billion dollars of opportunities as far as the defence is concerned. You have missiles, aircrafts, tanks, UAVs, large number of sub-systems and systems which are under indigenous R&Ds some of them are being procured directly which gives you large opportunities to participate in a big way.”
He cautioned the MSMEs that to avail the opportunities it needs to be realize that “defence is not a conventional business”.
The former DRDO chief stressed that - low volume of production, specific material, very unique processes, all have to be made available the small sector wants to make use of the opportunity open in the vast defence sector.
Saraswat, who shared that in his career he has worked with almost 200 MSMEs closely, opined that to be a part of the defence ecosystem, the MSMEs need learn the processes through interaction with various R&D organizations as well as the academic institutions in the country.
“We have to upgrade our infrastructure in terms of modern methods of manufacturing in MSMEs also if you want to make use of these opportunities coming. Quality control, certification and also stringent regulatory mechanisms which control the supply of these items to our arm forces have to be all part of your learning exercise,” he said at the FISME event.
He said large number of industries of tier 1 and tier 2 types have already started harnessing the availability of the offsets and so on.
Saraswat also mentioned that, “major opportunity is 30 per cent offset of this 150 billion dollar market.”
“Even if you become tier 2 or tier 3 supplier, in that you have great opportunity. But for that up-gradation of your manufacturing processes, quality culture, investments in some of these areas will have to be done in a big way.”
If you are able to do that then all these DPP processes will become a boon for the MSMEs sector, he added.
The acknowledged scientist also noted that even if USD 150 billion of the offsets of 30 per cent comes you still have USD 10-20 billion of business waiting.
He stressed that if country’s direction in expanding the defence business becomes larger, then different clusters for electronics, armaments, hydraulic, pneumatics, sensors, naval systems coukld come up and become part of MSME domain.
He said that MSMEs will be the main bedrock for doing the production of the components and subsystems and feeding into the system labs.
“The need of the hour is to bring in more and more innovation R&D into systems, then the government policies today will be very very beneficial in upgrading your infrastructure.”
Saraswat advised the small entrepreneurs that working with R&Ds, Defence PSUs, ordinance factories, taking all the tier 2 and 3 activities with the new processes with the new mantra should be the mantra.
FISME highlighted that MSMEs have an important role in India’s defence sector and its growth ambitions. Investment in the defence sector is expected to cross INR 25000 crore in 7-8 years. Under the 30 per cent offset policy for procurement of defence equipment in excess of INR 300 crores, this provides a significant opportunity for MSMEs to become part of the defence ecosystem. (KNN Bureau)
V K Saraswat, Member NITI Aayog and former Secretary of Defence (Research & Development) and Director General of Defence Research & Development Organisation (DRDO) said this while addressing at a seminar on ‘Opportunities for MSMEs in Defence Sector’ organized body industry body FISME on Thursday.
Interacting with the small entrepreneurs, Saraswat said, “You have almost about 150-200 billion dollars of opportunities as far as the defence is concerned. You have missiles, aircrafts, tanks, UAVs, large number of sub-systems and systems which are under indigenous R&Ds some of them are being procured directly which gives you large opportunities to participate in a big way.”
He cautioned the MSMEs that to avail the opportunities it needs to be realize that “defence is not a conventional business”.
The former DRDO chief stressed that - low volume of production, specific material, very unique processes, all have to be made available the small sector wants to make use of the opportunity open in the vast defence sector.
Saraswat, who shared that in his career he has worked with almost 200 MSMEs closely, opined that to be a part of the defence ecosystem, the MSMEs need learn the processes through interaction with various R&D organizations as well as the academic institutions in the country.
“We have to upgrade our infrastructure in terms of modern methods of manufacturing in MSMEs also if you want to make use of these opportunities coming. Quality control, certification and also stringent regulatory mechanisms which control the supply of these items to our arm forces have to be all part of your learning exercise,” he said at the FISME event.
He said large number of industries of tier 1 and tier 2 types have already started harnessing the availability of the offsets and so on.
Saraswat also mentioned that, “major opportunity is 30 per cent offset of this 150 billion dollar market.”
“Even if you become tier 2 or tier 3 supplier, in that you have great opportunity. But for that up-gradation of your manufacturing processes, quality culture, investments in some of these areas will have to be done in a big way.”
If you are able to do that then all these DPP processes will become a boon for the MSMEs sector, he added.
The acknowledged scientist also noted that even if USD 150 billion of the offsets of 30 per cent comes you still have USD 10-20 billion of business waiting.
He stressed that if country’s direction in expanding the defence business becomes larger, then different clusters for electronics, armaments, hydraulic, pneumatics, sensors, naval systems coukld come up and become part of MSME domain.
He said that MSMEs will be the main bedrock for doing the production of the components and subsystems and feeding into the system labs.
“The need of the hour is to bring in more and more innovation R&D into systems, then the government policies today will be very very beneficial in upgrading your infrastructure.”
Saraswat advised the small entrepreneurs that working with R&Ds, Defence PSUs, ordinance factories, taking all the tier 2 and 3 activities with the new processes with the new mantra should be the mantra.
FISME highlighted that MSMEs have an important role in India’s defence sector and its growth ambitions. Investment in the defence sector is expected to cross INR 25000 crore in 7-8 years. Under the 30 per cent offset policy for procurement of defence equipment in excess of INR 300 crores, this provides a significant opportunity for MSMEs to become part of the defence ecosystem. (KNN Bureau)
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